Taiwan's stock market fell hard on Wednesday, but local fund managers kept buying bank and financial stocks — a bad day for tech and index investors, a possible signal of where the smart money is rotating.

• The main index dropped as much as 999 points before closing down 589, falling below its quarterly average line.
• Tech and financial stocks led the drop, while AI, optical, shipping, food and tourism shares helped cushion the fall.
• Local investment trusts turned net sellers overall, dumping about NT$12 billion, but poured money into financial stocks — the entire top-five buy list was banks.
• E.Sun Financial was the most-wanted name, with trusts scooping up 67,000 lots this week, though foreign investors and retail selling still pushed the price lower.

Outlook: Expect continued rotation out of tech and into financial stocks if foreign investors keep selling Taiwan's AI-heavy index.